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European plastics producers are closing vegetation amid a deep decline in manufacturing as EU corporations battle to compete with a worldwide glut of low-cost materials.
Plastic manufacturing in Europe declined 8.3 per cent in 2023, in response to figures revealed by Plastics Europe, the business physique, on Monday. Mechanical plastics recycling — the most typical type of plastic recycling in Europe — has additionally declined for the primary time since 2018 due to a drop in demand, Plastics Europe mentioned.
The drop was deeper than anticipated, mentioned Virginia Janssens, managing director of Plastics Europe, including to considerations amongst energy-intensive industries about “deindustrialisation in Europe” resulting in a heavier reliance on “much less sustainable imports”. Germany is the continent’s largest plastics producer.
The autumn in Europe contrasts with a 3.4 per cent improve globally as international locations together with China and the US scale up plastics manufacturing. China was liable for 60 per cent of petrochemical capability will increase in 2023, in response to knowledge supplier S&P International.
The European plastic business’s share of the worldwide market has declined from 28 per cent in 2006 to 12 per cent final yr, the information confirmed.
Formidable local weather targets set in the course of the European Fee’s earlier time period, which ended with EU-wide elections in June this yr, have spawned a wave of regulation that corporations have complained is strangling progress.
In a report on European competitiveness revealed in September, former European Central Financial institution president Mario Draghi attributed a lot of the blame for the EU’s flagging financial progress to excessive power costs, “restrictive” laws and decrease price manufacturing overseas.
The glut of virgin plastic exterior Europe has additionally undermined the enterprise case for recycled materials.
Final month Plastics Recyclers Europe, an business physique, mentioned that the “downward development within the European plastics recycling market is alarming” and was “driving many recycling corporations out of enterprise”.
Firms together with power main ExxonMobil and chemical substances firm Sabic have mentioned this yr that they’d shut petrochemicals vegetation in Europe. Chemical substances companies LyondellBasell, Versalis and Trinseo have mentioned they’d evaluate or shut amenities.
Rob Ingram, chief government of Ineos’s enterprise making olefins — hydrocarbons used as a uncooked materials for chemical and polymer merchandise — and polymers, mentioned Europe’s bureaucratic and regulatory burden was a “self-inflicted wound”.
With out new funding in Europe, producers wouldn’t have the ability to fund the transition to extra sustainable manufacturing, he mentioned.
“A whole lot of our opponents have both closed or introduced strategic evaluations of European belongings,” he mentioned. “If everybody packs up store and goes elsewhere, we’re not going to have a [green] transition.”
Ingram added that whereas demand for brand spanking new plastics was sustained in Europe, funding in new capability was as a substitute flowing to the US and Asia.
“As an alternative of them being made in Europe, the place now we have pretty stringent environmental management . . . these supplies could also be produced elsewhere . . . or shipped midway around the globe to be consumed right here,” he mentioned, including: “It’s utterly counterproductive.”
Janssens mentioned the business needed targets for recycled content material in the whole lot from packaging to electrical autos “as a result of that can drive demand for round plastics and that can assist us”.
“We are also calling upon policymakers for some pressing [help] — whether or not it’s into fiscal or financial measures — to see what they’ll do to essentially improve that enterprise case for round plastics investments in Europe,” she mentioned.
